July 2021 - Quarterly Market Letter
On behalf of the team at 5, I am pleased to forward our market letter for the second quarter of...
Power factor is the ratio of working power to apparent power. The power used by electrical equipment is called working power, while the power that is drawn to a location and not directly used is called reactive power. Large amounts of reactive power require the use of capacitors in order to keep the current in phase. A good power factor exists when a client’s real power and apparent power are closely aligned. Unfortunately, many clients are unaware that they have poor power factor and that they are paying power factor penalties each month to the local utility when their power factor falls below a predetermined amount.
5 works with clients to discover and address power factor penalties as part of the firm’s initial discovery process. The analytical modeling tools used by 5 can detect and calculate power factor penalties on a per meter basis. Once penalties are determined, 5 works with the client to review potential causes which may include the need to install a capacitor bank, to update an existing set of capacitors, or perhaps even something as simple as replacing a blown fuse or fixing a motor issue. The client will either use their own internal resources or 5 can assist in requesting an engineering study, which includes the costs and simple rate of return analysis of the implementation of power factor correction hardware.
By working with 5, clients gain valuable insight into their entire energy spend, including the uncovering of power factor penalties. Without a comprehensive advisor, clients are typically left in the dark and never shown the multitude of ways to reduce and control their tariffed utility charges.
Contact Us to learn how we can help you to identify and address power factor correction penalties.